NYC Unemployment Rate Dips but is Still Higher than the National Average

According to the New York Department of Labor, the unemployment rate in the City that Never Sleeps actually dropped from 10.4% in January to 10.2% in February. Although the decrease is somewhat heartening, New York City’s is still well above the national average of 9.7.%

The New York Times is also reporting that new applications for unemployment benefits dropped in February, a sign that the economic slump may be starting to level off.

Specifics

New York State, excluding the New York City metro area, has an unemployment rate of 7.7%. Much of the City’s job losses occurred during the financial services industry; ½ of those were in the securities and commodities trading sector.

James Brown, an analyst with the state’s Labor Department told the New York Times that construction and finance took a big hit in February; however, hiring actually increased in business service industries such as law and accounting. The leisure industry also showed signs of improvement, which typically occurs when there is an upward economic trend. People engage in discretionary spending when they are more confident in their job security.

Peter Neinan, the statistics and research director for the Department is cushioning his optimism by stating that even though jobs have been added for two months straight in New York City, it typically takes the entire metropolitan area five years to recover from recession, once unemployment begins to regularly decline.

Budget Woes

But, alas, the employment rate is not the only indicator of economic health; so are budgetary issues. New York’s deficit is at $9 billion and is steadily growing. Lt. Governor Ravitch recently told the media on that if major budgetary changes aren’t made soon, the entire state will be out of cash by June 1.

Currently, there are three budgets under consideration: the governor’s, the Assembly plan, and the budget proposed by the Senate. Likely the budget finally settled upon will have an unpleasant mix of drastic cuts and higher taxes.

The rest of the country often looks to New York City to try and gauge what the rest of the country can expect. If the City is a trustworthy indicator, we are in for a long recovery process wherein we try and reconcile unemployment problems with budgetary crises. After all, budgets are funded through the taxes of the employed.

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